It’s the 5th anniversary of the financial crisis. What’s changed? Not much, sadly. Senator Al Franken (D-MN) used the occasion to call for an end to the conflict of interest with the way credit rating companies operate on Wall Street, which played a large part in the economic crash and recession. Currently, they operate as a play-to-play scheme. The banks get to choose which agencies rate their products. You can see where that goes.
“We’ve made some significant progress in our efforts to prevent another economic meltdown, but the work is not done,” said Sen. Franken. “The financial stability of millions of hardworking Americans is still at risk because the SEC hasn’t taken the necessary steps to clean up the credit rating agencies—the industry credited with playing a key role in the collapse. The measure I wrote into the Wall Street Reform Law would eliminate the inherent conflict of interest in the industry and end their pay-to-play model. I’m working hard to make sure the law gets implemented so that Minnesotans don’t have to suffer through the devastation of another economic collapse.”
Franken and Senator Roger Wicker (R-MS) addressed this issue (bipartisanship!) in their Franken-Wicker provision in Dodd-Frank, however, as with any attempt to impose the slightest bit of oversight on the cause of our economic collapse, the reform ended up at the SEC after passing the Senate 64-35. The final bill that passed ordered the SEC to study the problem. Insert maniacal laughter here.
The SEC required two years of study before they determined last December that yes, there were conflicts of interest in the credit rating system that contributed to the financial collapse. At the urging of Sens. Franken and Wicker, the SEC held a round table in May to consider what future steps, if any, need to be taken to eliminate the conflicts. In July, Sens. Fanken and Wicker called on the SEC to finally issue new rules regarding the conflict of interest that their own study found.
Yet, as we head into late September 2013, there are no new rules.
This sordid tale of bureaucratic obstruction is a reminder of why we need senators like Al Franken, Elizabeth Warren, and Bernie Sanders. Even the smallest bit of common sense change requires prolonged combat.
The Wall Street special interests are dug in, but Al Franken is taking the fight to them.